International Journal of Trend in Scientific Research and Development (IJTSRD)

Conference Issue | March 2019 Available Online: www.ijtsrd.com e-ISSN: 2456 - 6470

Fostering Innovation, Integration and Inclusion Through

Interdisciplinary Practices in Management

Non-Performing Assets: A Study of Shree

Warana Co-operative Bank Ltd. Warananagar
Mr. Tushar Patil1, Prof. Sagar Sutar2
1M.Phil Student, 2Assistant Professor
1chhatrapati Shahu Institute of Business Education and Research, Kolhapur, Maharashtra, India
2Ashokrao Mane Group of Institutions, Vathar Tarf Vadgaon, Maharashtra, India

Organised By: ABSTRACT

Management Department, Chhatrapati The three letters “NPA” strike fright in banking sector and business circle today.
Shahu Institute of Business Education NPA is a short form of “Non-Performing Assets”. In banking, NPA are loans given
and Research, Kolhapur, Maharashtra to doubtful customers who may or may not repay the loan on time. There are
two types of assets viz. performing and non- performing. Performing loans are
standard loans on which both the principle and interest re secured and their
return is guaranteed. Non-performing assets [NPA] is result of asset Liability
mismatch, A NPA account in the books of accounts is an asset as it indicates the
amount receivable from the defaulters. It means if any bank gives loan to the
customer if the interest for the loan is not paid by the customer till 90 days then
the account is called as NPA account. NPAs reflect the performance of the banks.
How to cite this paper: Mr.Tushar Patil
| Prof. Sagar Sutar "Non-Performing
Assets: A Study of Shree Warana Co- KEYWORDS: Non Performing Assets, Causes, assets, liabilities etc.
operative Bank Ltd. Warananagar" INTRODUCTION
Published in International Journal of A high level of NPA suggest high profitability of large number of credit defaults
Trend in Scientific Research and that affect the profitability and net worth of banks and also erodes the value of the
Development (ijtsrd), ISSN: 2456-6470, assets. The NPAs growth involves the necessity of the provisions, which reduce
Special Issue | the overall profits and shareholders values. The issues of non- performing assets
Fostering have been discussed length for financial system all over the world the problems of
Innovation, NPAs is not only affecting the banks also the whole economy. The Indian banking
Integration and has come from a long way from being a sleepy business largely brought about by
Inclusion Through the large dose of liberalization and economic reform that allowed banks to
Interdisciplinary explore new business opportunities rather than generating from conventional
Practices in stream (i.e. borrowing and lending). Modern commercial banks perform large
Management, IJTSRD23075 number of function and provide service to industries as well as to the consumers.
March 2019, It is not possible to make definite list of the functions of bank.
pp.101-104, URL:
https://www.ijtsrd.com/papers/ijtsrd2 It feels necessary to understand the study regarding management of NPAs well as
3075.pdf position of NPAs and the comparative study of NPA position of five branches of
Shree Warana Co-operative bank ltd. Warananagar.

Objectives of the Study:- Kodoli, Vadgaon, Kini and Paragon). There are total numbers
1. To understand the meaning and nature of NPA. of NPA account is 274 in the year of the 2015-16. According
2. To examine the causes for NPAs in bank. to that is not possible. Hence 10% of population of total
3. To study the NPA position of five branches (2013-14 to NPAs account has been selected for the study. For these
2015-16). study 27 respondents (NPA’s) has been considered. For the
4. To know about assets classification. study percentage analysis and statistics tools has been used
5. To provide better suggestion on the basis of NPAs of five for the data analysis.
branches.
Data Collection:-
Research Methodology:- The data collection is consists of two methods.
Research Methodology is the systematic, theoretical analysis A. Primary Data
of the methods applied to a field of study. For this specific B. Secondary Data
study five branches has been considered these are (Warana,

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 International Journal of Trend in Scientific Research and Development (IJTSRD) @ www.ijtsrd.com eISSN: 2456-6470
A. Primary Data:-The primary data were collected from Types of NPA
personal interview with bank manager and account Gross NPA: - Gross NPAs are the sum total of all loan assets
executives. that are classified as NPAs as per RBI guidelines as on
B. Secondary Data:-The secondary data were collected balance sheet date. Gross NPA reflects the quality of the
through various books, bank statements, annual reports, loans made by banks. It consists of all the nonstandard assets
research journals and bank website. like as sub-standard, doubtful, and loss assets. It can be
calculated with the help of following ratio:
Limitations of the Study:-
1. The study is limited to Shree Warana Co-operative bank Gross NPAs Ratio = Gross NPAs / Gross Advances
ltd. Warananagar.(Warana, Kodoli, Vadgaon, Kini and
Paragon) Net NPA: - Net NPAs are those type of NPAs in which the
2. Banks are being overburdened with work so sharing bank has deducted the provision regarding NPAs. Net NPA
knowledge from bank employee was limited. shows the actual burden of banks. Since in India, bank
3. The study is carried only non- performing assets. balance sheets contain a huge amount of NPAs and the
4. Confidential information was not shared process of recovery and write off of loans is very time
consuming, the banks have to make certain provisions
Non- Performing Assets against the NPAs according to central bank guidelines. It can
An asset, including a leased asset, becomes non-performing be calculated by following:
when it ceases to generate income for the bank.
Net NPAs = Gross NPAs – Provisions / Gross Advances-
A ‘non-performing assets’ was defined as accredit facility in Provisions
respect of which the interest and/ or installment of principle
has remained ‘past due’ for a specified period of time. The Assets Classification
specified period was reduced in a phased manner as under: Under the prudential norms of asset classification, banks are
now required to classify their advance in the four broad
w.e.f. 31.03.2001: 180 days groups. Broadly speaking, classification of assets into four
w.e.f. 31.03.2004: 90 days categories would be done taking into account the degree of
well-defined credit weakness, risks and the extent of defense
90 days’ delinquency norms are not applicable to agriculture on collateral security for realization of dues, As assign if I
segment. can’t a welcome derivation from the earlier concepts, the
assets classification into four groups is based on age of the
With the effect from March 31, 2004, NPA shall be a loan or NPA advances, which is shown as under:
an advance where: 1. Standard Assets-Standard asset is one which does not
1. Term loan: Interest and /or installment of principle disclose any problem and which does not carry more
remain over due for a period of more than 90 days. than normal risk attached to the business. Such an asset
2. Cash credit/overdraft: The account remains ‘out of should not bean NPA.
order’ for a period of more than 90 days. 2. Sub- standard Assets-With effect from 31 March 2005,
3. Bills: The bill remains overdue for a period of more than sub-standard asset would be one, which has remained
90 days from due date of payment. NPA for a period less than or equal to 12 months.
4. Other loans: Any amount to be received remains 3. Doubtful Assets-With effect from March 31, 2005, an
overdue for a period of more than 90 days. asset would be classified as doubtful it has remained in
5. Agricultural accounts: In the case of agriculture the substandard in the substandard category for a period
advances, where repayment is based on income from of 12 moths.
crop. An account will be classified as NPA as under: 4. Loss Assets-A loss asset is one where loss has been
 If loan has been granted for short duration crop: interest identified by the bank of internal or external auditor so
and /or installment of principle remain overdue for two the RBI inspection but the amount has been written off
crop seasons beyond the due date. wholly.
 If loan has been granted for long duration crop: interest
and /or installment of principle remain overdue foe one
crop seasons beyond due date.
Data Analysis
Table 1.1 Branch wise Loans and Advances provided for the year 2013-14 to 2015-16
(Rs. In Lacs)
Loans and advances Total Amount % of loans and advances Total (%)
Branch
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Warana 2657.40 3433.45 3478.56 9569.41 27.77 35.88 36.35 100
Kodoli 691.25 688.53 780.20 2159.98 32 31.87 36.13 100
Pargon 922.66 839.09 927.70 2689.45 34.31 31.20 34.49 100
Vadgaon 1732.30 1868.89 1926.24 5527.43 31.34 33.81 34.85 100
Kini 866.10 874.50 834.98 2575.58 33.63 33.95 32.42 100
(Source- secondary data)
The above table no. 1.1 shows the information about loans and advances for the years, 2013-14 to 2015-16 of the all five
branches

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It is found that the loans and advances are increasing trend of Warananagar & Vadgaon branch. The loans and advances
provided by kodoli branch was constant in the year 2013-14 to 2014-2015 and increased in the year 2015-16.The amount of
loans and advances are not constant and changing every year of Paragon & kini branch.
Table 1.2 Recovery against loans and advances for the year 2013-14 to 2015-16
(Rs. In Lacs)
Recovery % of Recovery
Branch
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Warana 2575.52 3301.10 3360.63 96.91 96.14 96.60
Kodoli 606.96 619.23 729.67 87.80 89.93 93.52
Pargon 826.71 724.03 836.87 89.60 86.28 93.11
Vadgaon 1658.70 1783.32 1793.61 95.95 95.42 93.11
Kini 840.96 823.67 784.25 97.09 94.18 93.92
(Source- secondary data)
The above table no. 1.2 shows the information about recovery against loans and advances for the years, 2013-14 to 2015-16 of
the all five branches.
It is observed that in the year of 2013-14 higher recovery has been done by Kini branch i.e. 97.09% whereas very less recovery
has been done by Kodoli branch i.e. 87.80%.It is found that in the year of 2014-15 higher recovery has been done by Warana
branch is 96.14%. Whereas very less recovery has been done by Pargon branch i.e. 86.28%. It is found that in the year of 2015-
16 higher recovery has been done by Warana branch is 96.60%. Whereas Pargon and Vadgaon branch has recovered same
percentage of amount i.e.93.11%.
Table 1.3 Gross NPA of 5 branches for the year 2013-14 to 2015-16
Gross NPA Amount % of Gross NPA
Branch
2013-14 2014-15 2015-16 2013-14 2014-15 2015-16
Warana 81.88 132.25 117.93 3.08 3.85 3.39
Kodoli 84.29 69.30 50.53 12.19 10.06 6.47
Pargon 95.95 115.06 63.83 10.39 13.71 6.88
Vadgaon 73.60 54.57 132.63 4.24 4.57 6.88
Kini 24.14 50.83 50.73 2.78 5.81 6.07
(Source- secondary data)
The above table no. 1.3 shows the information about Gross NPA for the years, 2013-14 to 2015-16 of the all five branches.
It is found that very less Gross NPA of Kini branch is 2.78%and very high Gross NPA of Kodoli branch i.e. 12.19% in the year of
the 2013-14. Gross NPA of Kini and Vadgaon branch are increasing and that is not good for the bank. Gross NPA of Kodoli
branch are decreasing. NPA of Warana and Pargon branch is fluctuating. It is observed that very less Gross NPA of Warana
branch is 3.85 %and very high Gross NPA of Pargon branch i.e. 13.71% in the year 2014-15. It is analyzed that very less Gross
NPA of Warana branch is 3.39 and very high Gross NPA of 6.88 for two branches i.e. Pargon and Vadgaon for the year of 2015-
16.
Table 1.4 Causes for Repayment of Loans and Advances
Sr. No. Causes No. Respondent %
1 Employment termination 12 44.44
2 Diversification of investment 04 14.82
3 Unwanted expenses 08 29.62
4 Other 03 11.12
Total 27 100
The above table no. 1.4 shows causes for repayment of loans and advances.
It is observed that maximum respondents are being non-performing assets because of employment termination i.e. 44.44%.
Table 1.5 Classification of Assets
Warana Kodoli Pargon Vadgaon Kini
Standard Assets Standard assets 3360.63 729.67 863.87 1793.61 784.25
Sub Standard Assets 40.20 20.51 11.44 44.38 19.05
D1 39.76 9.50 12.58 44.37 20.17
D2 15.87 4.57 26.53 13.02 11.07
Nonperforming Assets
D3 22.10 15.95 13.28 30.86 0.44
Loss Assets 0.00 0.00 0.00 0.00 0.00
Amount NPA 117.93 50.53 63.83 132.63 50.73
Gross NPAs Total Amount 3478.56 780.20 927.70 1926.24 834.98
(Source- secondary data)
The above table no. 1.5 shows assets classification of the five branches.
The asset classification of five branches which shoes in sub-standard assets, doubtful 1 doubtful 2 doubtful 3 and loss assets.
The above table also shows how branches are having their non-performing assets.
Findings advances provided by kodoli branch was constant in the
1. It is found that the loans and advances are increasing year 2013-14 to 2014-2015 and increased in the year
trend of Warananagar & Vadgaon branch. The loans and 2015-16.The amount of loans and advances are not

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 International Journal of Trend in Scientific Research and Development (IJTSRD) @ www.ijtsrd.com eISSN: 2456-6470
constant and changing every year of Paragon & kini Conclusion
branch(Refer table no.1.1) The study is related to the only five branches of Warana
2. It is observed that in the year of 2013-14 higher recovery bank. The branches are Warana, Kodoli, Vadgaon, Kini and
has been done by Kini branch i.e. 97.09% whereas very Paragon. The financial position of the Warana branch is
less recovery has been done by Kodoli branch i.e. good.
87.80%.It is found that in the year of 2014-15 higher
recovery has been done by Warana branch is 96.14%. The study is about non - performing assets of five branches,
Whereas very less recovery has been done by Pargon there are some branches whose loans and advances are
branch i.e. 86.28%. It is found that in the year of 2015-16 increasing and some branches are constant. The recovery of
higher recovery has been done by Warana branch is Warana branch is good as per findings in the study.
96.60%. Whereas Pargon and Vadgaon branch has
recovered same percentage of amount i.e.93.11%. (Refer The overall Gross NPA of bank has been increased and that is
table no.1.2) not good for the bank.
3. It is found that very less Gross NPA of Kini branch is
2.78%and very high Gross NPA of Kodoli branch i.e. References:
12.19% in the year of the 2013-14. Gross NPA of Kini and [1] Books:-
Vadgaon branch are increasing and that is not good for Bharati V. Pathak, The Indian financial
the bank. Gross NPA of Kodoli branch are decreasing. system,Pearson,2008,Second edition, Page no. 576
NPA of Warana and Pargon branch is fluctuating. It is Benton E. Gup And James W. Kolari, Commercial
observed that very less Gross NPA of Warana branch is Banking: The Management of Risk, Susan Elbe,
3.85 %and very high Gross NPA of Pargon branch i.e. 2004,Third Edition Chapter no.2 page no. 51-66
13.71% in the year 2014-15. It is analyzed that very less
[2] Referred reports:-
Gross NPA of Warana branch is 3.39 and very high Gross
Annual report Financial Year 2013-14
NPA of 6.88 for two branches i.e. Pargon and Vadgaon for
Annual report Financial Year 2014-15
the year of 2015-16. (Refer table no.1.3)
Annual report Financial Year 2015-16
4. It is observed that maximum respondents are being non-
Annual report Financial Year 2016-17
performing assets because of employment termination
i.e. 44.44%. (Refer table no.1.4) [3] Journals:-
International Journal of Innovations in Engineering and
Suggestions Technology (IJIET)
 The Warana branch must maintain their recovery policy. International Journal of Marketing, Financial Services &
 The Kodoli branch must improve in the recovery of loans Management Research___ ISSN 2277- 3622 Vol.2, No. 9,
and advances. The branch should prepare the portfolio of September (2013)
customers while providing loans.
[4] Website:-
 The other branches must be improve in the strategy of
http://www.waranabank.com
recovery.
https://rbi.org.in
 The Kodoli branch must increase loans and advances to
the customers.
Copyright © 2019 by author(s) and
 The bank should confirm about employment of customer
International Journal of Trend in
and then provides loans and advances.
Scientific Research and Development
 The bank should make rating to customers.
Journal. This is an Open Access article distributed under the
terms of the Creative Commons Attribution License (CC BY
4.0) (http://creativecommons.org/licenses/by/4.0)

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